Buy HDFC AMC; target of Rs 3000: ICICI Direct
ICICI Direct is bullish on HDFC AMC has recommended buy rating on the stock with a target price of Rs 3000 in its research report dated May 11, 2020.
May 13, 2020 / 04:22 PM IST
ICICI Direct's research report on HDFC AMC
HDFC AMC reported weak earnings with an uncertain outlook. Regressive AUM growth, amid Covid-19, arrested topline growth. Unrecognised NCD loss from Essel group worth Rs 95 crore impacted other income and earnings. Industry AUM declined to Rs 22.3 lakh crore as of March 2020 vs. Rs 26.5 lakh crore as of December 2019. Equity segment saw a decline of ~24% QoQ to Rs 8.3 lakh crore, led by correction in markets, debt & liquid schemes saw ~7%, ~ 11% QoQ decline in AUM due to outflows during the quarter. SIP flows continued to remain consistent at Rs 8600 crore in Q4FY20.
Given elevated economic uncertainty, amid Covid-19, its business model is preferred involving least credit risk. Hence, we maintain our BUY rating on the stock with a target price of Rs 3000 per share.
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